Regulators are hoping to control the threat of moving money across borders to fund terrorism. However, it’s still fairly easy to do that through traditional financial channels, and the evidence that cryptocurrency funds terrorism is mostly anecdotal, as of today.

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If you’d put your Holiday bonus into Bitcoin, you’d have doubled your money by now. If you’d bought Ethereum instead, you’d be up 3,000%. Bitcoin, Ethereum, and the growing number of altcoins in the market have all rallied over 150% since January.

However, most money flowing into these currencies today is speculative. Some are calling it a bubble – with talking heads on TV covering Ethereum, and regular people “investing” in cryptocurrency to make a quick buck. While this buying activity drives up the price of Bitcoin and Ethereum, it’s also causing more price volatility in both directions. It is time to rethink cryptocurrency investing, with the goal of contributing long-term value to the ecosystem, not propping up the price bubble.

Both cryptocurrencies are their own ecosystems, with Bitcoin’s acting more like a digital gold, and Ethereum acting as a platform for smart contracts. So, if you believe these technologies have a place in our future, you should be regularly buying bitcoin and then using it as a payment when possible – buy lunch with bitcoin, send your friend money with bitcoin, etc. Bitcoin’s market cap gets the most attention, but it’s transaction volume, another key measure of adoption, is mostly overlooked.

Ethereum is a little different – by allowing people to build new cryptocurrencies on top of smart contracts, it acts as a platform for enforcing the rules. If bitcoin is digital gold, Ethereum is more like a digital form of the US government.

With a more flexible and modernized programming language, Ethereum has made headway with multinational companies alongside the growing startup ecosystem. These players can build their own coins and sets of rules on top of Ethereum’s technology – like a “white-label” cryptocurrency.

Some interesting projects on Ethereum’s platform include:

SlackCoin – an artificially intelligent chatbot that rewards employees for certain behaviors. Want to incentivize information exchange? Open communication? Boost efficiency? Set up SlackCoin. SlackCoin is an alt-coin incentive to be the employee you’d want on your team.

FileCoin – The AirBnb of hard-drive space. Have an extra 500GB? Rent it out to the network and get paid in FileCoin. Then when you need to borrow some later, you can spend your FileCoin instead of buying a new hard drive.

KYC-Chain – A virtual wallet to authenticate your identity. Instead of doing know-your-customer from scratch every time you open a financial account, all institutions can refer to the KYC-chain.

There are dozens of new applications being produced on Ethereum every day. Like Bitcoin, investing in Ethereum means investing in its real-world applications. If you’re putting money into cryptocurrencies with the goal of converting it back into USD for a quick profit, you’re not investing, you’re gambling.

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What’s next for the robo-advisor? First championed by venture-backed startups, the robo-advisor was quickly replicated by incumbent firms. Today, the startups in the space are seeing declining growth rates, while competing with the incumbents they once threatened. To achieve staying power as stand-alone companies, the next generation of wealth management startups will need to invest heavily in cutting-edge technology, not clever marketing.

In the past 5 years, VC-backed robo-advisor startups appeared left and right, offering low-cost diversified ETF portfolios that are “advised” algorithmically with a risk questionnaire. Many industry analysts were quick to call their bluff. The robo-advisors, they said, were just a traditional target-date retirement fund with a sleek mobile app, marketed as a replacement for a human financial advisor.

The Copycats

Revolutionary technology? Maybe not. But the startup robo-advisors were onto something, and incumbents started copying them. In 2015, Vanguard and Schwab launched their own robo-advisors, which gobbled up more assets in six months than the startups did in four years, combined.

Vanguard and Schwab eclipsed the startup competition, not because their product was better, but because they had economies of scale, a recognizable brand name, and large customer bases to cross-sell to. All of this translates to a relatively low customer acquisition cost (CAC) for their new products.

E*TRADE and TD Ameritrade have since released their own robo advisors. Fidelity, Merrill, and Morgan Stanley are likely follow suit, further eclipsing the market.

An Uphill Battle

Analysts estimate startup robo-advisors spend up to $1000 to acquire a new customer, and will need $40B in assets to break even. The largest startup robo-advisor, after five years operating, is at $10B, and growth rates have slowed drastically.

With incumbent robo-advisors going “mainstream,” most people have access to a robo-advisor from their existing financial institution. Given the high costs of switching, this doesn’t bode well for the startups’ growth.

What’s next?

For the well-funded startup robo-advisors, a diversified product suite is a good next step. That way, they can cross-sell to the (mostly young) clients they acquired, as their financial needs become more complex. Wealthfront, the second-largest startup robo-advisor, seems to be pursuing this strategy, offering a portfolio line of credit, 529 plans, and direct-index investing to help wealthier clients avoid underlying ETF fees. Complementary products might boost per-customer revenue, but until a startup robo-advisor can drastically lower their acquisition costs, they will continue to experience the same setbacks.

For the next generation of fintech startups, the rise and fall of startup robo-advisors provides some valuable lessons:

Invest in technology, not customer experience and design, which are too easy to replicate.

Watch your CACs. Robo-advisors reduce some operational costs, but that edge is wiped out by sky-high acquisition costs.

Sell high – don’t raise money at valuations that make exiting impossible.

License your technology to the industry you thought you’d disrupt. B2B robos need just a handful of deals to prosper, and can do so with less manpower.

Beneath the glitz of the heavily-funded fintechs, smaller players are already focusing heavily on technology. In the investment world, tomorrow’s winners will build tech to enhance the incumbents, rather than competing for their customers.

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We’re excited to announce that we’ve connected our core products — Portfolio View and Trading Ticket — to Interactive Brokers, the largest electronic broker by DARTs and a top choice for active traders worldwide.

Over the past month, we launched early-access IB support on Stockflare and the Trigger Finance app. Today, we’re extending IB connectivity to our entire partner network, so IB clients can view their accounts and trade from any of the apps in our sphere.

“As one of the leading platforms for active investors, we are constantly upgrading our systems for the future. We’ve heard from our customers that they want to be able to take secure action from the apps they use,” said Steve Sanders, Executive Vice President of Interactive Brokers. “Our partnership with TradeIt enables IB to reach our customers wherever they prefer to operate with a high level of sophistication and security.”

After four decades of focus on technology and automation, Interactive Brokers is equipped to provide cutting edge technology and tools at the lowest costs in the industry. We’re thrilled to distribute IB’s offering across our partner network to help their clients stay connected from anywhere.

If you’d like to add IB connectivity to your platform, shoot us a note at support@trade.it.